House joint panel okays legislative franchises for mining companies

MANILA A joint committee of the House of Representatives on Wednesday approved a measure requiring the acquisition of legislative franchises for all mining operations in the country.

The House committee on legislative franchises and committee on natural resources approved an unnumbered substitute bill, which proposes amendments to the Philippine Mining Act of 1995.

Under the bill, all private contractors must first secure a legislative franchise as a prerequisite before they could apply for a large-scale quarrying permit or an exploration permit for purposes of entering into a mineral agreement, or financial and/or technical assistance agreements.

Furthermore, existing contract holders shall have two years upon the law's implementation to secure a legislative franchise.

Speaker Pantaleon Alvarez, principal author, said the bill creates a rigid process which weeds out the underserving companies from securing a mining permit, which in turn, could ensure that the country and its people shall be the first to benefit from the extracted minerals.

By requiring mining firms to acquire a legislative franchise, the people, through their elected representatives, would be able to scrutinize the applicants, their capability and track record, in order to make sure that only responsible mining firms are allowed to operate in the country, Alvarez said.

The bill prohibits all types of mining activities in critical watersheds.

It extends the duration of minerals processing permit up to 10 years from the current five, and shall not exceed a total term of 30 years.

To further promote the domestic processing of raw ore, an export tax regime shall be imposed based on the selling price or the gross value of raw ore exported, whichever is higher. A 20 percent export tax shall be imposed two years upon the law's effectivity; 40 percent on the third year; and 60 percent on the fourth year onwards.

Alvarez said this provision could help develop the mineral processing industry in the country and to benefit the localities where the minerals came from.

One of the reasons pointed out for the insignificant contribution of the mining industry to the country's economy is the fact that mineral ores in the country after being mined or extracted, while still unprocessed, are already exported directly to foreign countries as raw materials, Alvarez said.

The bill likewise requires private contractors to fully rehabilitate the areas they used for mining within 10 years from the expiration of their permits.

Failure to do so would mean a penalty of PHP100 million per hectare that has not been rehabilitated.

Any public official or employee who facilitates the approval of permits in areas which are closed to mining operations shall be slapped with a fine of PHP2 million for each permit, or suffer six to 12 years of imprisonment, or both. (PNA)

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